Copper, the key transition metal, hit a price of $11,000 per ton a couple of months ago. Goldman Sachs forecast it could surge all the way to $12,000 as electrification really gets going—because there are not enough copper mines. Yet, the lack of mining capacity is just one problem for the transition. The other, at least in what is commonly referred to as the collective West, is copper processing capacity. Most of it is in China. Without it, the transition will stumble and possibly collapse.
First, they need more copper mines, wherever they can be built—preferably in jurisdictions not already in the Chinese sphere of influence, which has been growing in the past couple of decades via infrastructure investments and mining investments. China's share of the global copper mining output is a fifth of the total, thanks to its mining assets abroad. Simultaneously, the Western transition governments need more copper refining capacity—but it must be cheap to make sense.